4:20-cv-00657
E.D. Tex.Jul 26, 2021Background
- OPS (plaintiff) sued PAWS (defendant) for patent infringement and originally alleged infringement of U.S. Patent No. 9,848,295; OPS previously sought to add the ’329 patent.
- On June 2, 2021 PAWS produced voluminous source code; OPS reviewed it and on the court-ordered amendment deadline (June 11, 2021) moved for leave to add allegations of infringement of U.S. Patent Nos. 9,922,522 and 9,924,314.
- PAWS opposed, arguing undue delay, futility of the claims, and undue prejudice (including reopening discovery and claim construction).
- The Court applied the interplay of Rules 16(b) and 15(a): movant must show good cause post-deadline, then Rule 15’s liberal standard applies; the Court evaluated the Foman/Smith factors.
- The Court found OPS’s motion timely given receipt of voluminous code shortly before the deadline, no bad faith, no prior failure to cure, little undue prejudice (discovery was at an early stage and pretrial was over a year away), and that the proposed amendments were not futile under a Rule 12(b)(6) standard.
- Result: the Court granted leave to file the second amended complaint and deemed it filed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness / Undue delay | Motion filed by deadline after timely review of source code | Amendment is last-minute and untimely | Granted—timely; presumption of timeliness since filed by deadline |
| Bad faith / dilatory motive | Amendment based on newly discovered facts from PAWS source code | Motion seeks to prolong and derail litigation | No bad faith; granted |
| Undue prejudice (reopening discovery/claim construction) | Discovery early; pretrial >1 year; any extension manageable | Would require reopening discovery and new claim construction, prejudicing defense | No undue prejudice; any prejudice curable by amended scheduling order |
| Futility of amendment | Proposed claims identify infringement from produced source code; state a claim under 12(b)(6) standard | Amendment fails to state viable patent claims | Not futile; amendment survives futility review |
Key Cases Cited
- Foman v. Davis, 371 U.S. 178 (1962) (sets factors for leave to amend)
- Smith v. EMC, 393 F.3d 590 (5th Cir. 2004) (lists five Foman factors applied in Fifth Circuit)
- S&W Enters., L.L.C. v. SouthTrust Bank of Ala., N.A., 315 F.3d 533 (5th Cir. 2003) (distinguishes Rule 16/Rule 15 when amendment deadline passes)
- Reliance Ins. Co. v. La. Land & Expl. Co., 110 F.3d 253 (5th Cir. 1997) (articulates good-cause factors for modifying scheduling orders)
- E.E.O.C. v. Serv. Temps Inc., 679 F.3d 323 (5th Cir. 2012) (addresses Rule 16 good-cause standard)
- Duggins v. Steak 'N Shake, 195 F.3d 828 (6th Cir. 1999) (explains prejudice where added claim forces reopening discovery)
- Little v. Liquid Air Corp., 952 F.2d 841 (5th Cir. 1992) (district court’s discretion in granting leave to amend)